The consumer protection bureau was the brainchild of Elizabeth Warren, a bankruptcy expert, consumer advocate and Harvard Law Professor who lobbied heavily for the creation of bureau.  So naturally, Ms. Warren seemed the obvious, as well as the ideal, person to head the new consumer protection bureau.

(Video by the Main Street Brigade in support of Elizabeth Warren candidacy for the Consumer Financial Protection Bureau directorship.)

Pressure mounts for ‘Sheriff’ Elizabeth Warren says Jennifer Liberto at CNN Money:

Last week, 43 House Democrats sent a letter to President Obama, asking him to nominate Warren and requesting a meeting at the White House to discuss Warren’s appointment.

“You have an opportunity to appoint to head this body a true visionary — not the usual Washington careerist. You have an opportunity to appoint to this body the single best-qualified choice,” said the letter, signed by Rep. Barney Frank, D-Mass., and Rep. Carolyn Maloney, D-N.Y., among others.

But Ms. Warren hasn’t exactly made friends with the powerful Banking community or the Treasury Department in her role as Chair of the Congressional Oversight Panel for TARP (Troubled Asset Relief Program).

(h/t Alain Sherter for this oldie, but goodie of Ms. Warren and Mr. Geithner)

From the moment the bill was signed into law the Obama administration was quick to point out Warren isn’t the only candidate for the director job.  And even some congressional allies began sounding like detractors.  Chris Dodd, chairman of the Senate Banking Committee warned Warren’s nomination could cause a protracted and lengthy battle in the Senate.  And he has repeatedly questioned whether Warren has the appropriate management skills to lead a large federal bureaucracy.

As Shahien Nasiripour at Huffington Post explains Dodd Questions Elizabeth Warren’s Management Experience — A Concern He’s Never Raised Before

… it’s the first time Chairman Dodd has publicly raised such an issue when it came to evaluating presidential nominees to agency positions under the banking committee’s purview.

A review of transcripts from past confirmation hearings shows that Dodd has never questioned the management experience of nominees to head federal agencies his committee oversees. The heads of the Securities and Exchange Commission, Department of Housing and Urban Development, Federal Housing Administration, the Export-Import Bank and the National Credit Union Administration all survived hearings under Dodd’s chairmanship without him once asking a question about the experience needed to guide their respective agencies.

Nor did Dodd raise any management questions when prospective bank regulators came before his committee — even when the regulators did not have significant management experience. In the two years prior to his assuming the chairmanship in 2007, the heads of the Federal Reserve, the Federal Deposit Insurance Corporation, Office of Thrift Supervision, Office of the Comptroller of the Currency, and a prior chief of the SEC all came before his committee. Each time, Dodd declined to ask about their experience running bureaucracies, a review of transcripts shows.

In fact, Dodd didn’t even show up for two of those hearings.

Two names that are bandied about to the director Michael Barr, a top lieutenant to Treasury Secretary Timothy Geithner, and Eugene Kimmelman, a top lawyer in the Justice Department.  But a third might win the prize.

In Obama & Frank: double dips and Washington exit strategies, Christopher Whalen:

It is becoming clear that the Obama Administration may not pick a candidate for the CFPB job until after the November election in order to dodge this very political issue.  By holding the voting on the new agency head until after the election, members of both parties will be able to extract maximum contributions from the banking lobby.  But I hear that the choice may have already been made.

It may surprise some observers that House Financial Services Committee Chairman Barney Frank may want the CFPB job for himself.  Frank reportedly has already expressed interest to the White House.  Sad to say, Chairman Frank probably has seniority over Chairman Warren.

“Barney did some heavy lifting,” says a source on the committee who is close to Frank.  “He might want a different gig, especially if he loses the chairman’s seat in November.  Frank would not want to hang around in Congress as part of the minority.  Being the first CFPB emperor, however, could be a more interesting gig than, say, eventually being made head of HUD of the FHA.”

Elizabeth Warren explains her problem with Congress’ response to protecting the American people during a radio interview in June ’10 with host Tom Ashbrook of On Point:

I got nothing when I walk into the room. You have to understand this. I don’t walk in with any votes, I don’t have any money to give. I just want to talk to people about what’s going on. And I think the part that is the hardest is sometimes I will talk to people in Congress – look, I think most of them, they didn’t go to Congress in order to lie, cheat, and steal. I think most of them went because they had some sense somewhere in their hearts at some point about public service. And I talk about what happens to middle class families and I watch faces, I watch eyes, connect on this, that say, “Yeah, I go back home, too.” And they name towns across America. And they say, “People are scared, people are worried, people are out of work. These are the things I hear in the grocery store, these are things I hear in the town hall meetings.”

TOM ASHBROOK: So what’s the counterweight then?

ELIZABETH WARREN: And then I say, “OK, look, here are three things we can do. But it’s about reining in an incredibly powerful industry. It’s about reining in a group that gives money and knows how to exercise power in Washington.” And I just watch the light go out, because it’s not going to happen.

Elizabeth Warren wants to protect the people.  But it’s the Bankers, not Ms. Warren or the American people, that have the money and the power to keep the lights on for Congress and President. So Congress knows who they need to protect first and foremost.  And its not the people.  Or Ms. Warren.

But why Barney Frank for the Director of the consumer financial protection bureau?

From Alain Sherter’s at BNet - Is Barney Frank After Elizabeth Warren’s Job Even Before She Has It?:

Frank, a fixture on Capitol Hill, knows how to cut deals with big business, as he showed in helping lead the fight over financial reform. It’s no accident that his leading financial contributor over his career is the American Bankers Association, followed by JPMorgan Chase (JPM).

So what are the odds of the Bankers getting what the Bankers want?

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Elizabeth Warren

Truth, transparency, and integrity!

If our nation is to have any chance to recover from the throes of the worst economic crisis since the 1930s, it had better start elevating and embracing these aforementioned virtues. Time and time again, when we review business practices and political decisions at the center of our crisis, we have seen a glaring lack of these prized virtues. Why and how were these principles compromised? The pursuit of short term profit. Regrettably, this pursuit came at the expense — if not total violation — of these principles. The ultimate long term costs are now being borne by the nation as a whole.

Sense on Cents abhors those who would compromise these core values. Similarly, Sense on Cents embraces those who cherish these values. To that end, I strongly endorse Elizabeth Warren to head the Consumer Financial Protection Agency.

Make no mistake, the pursuit of truth, transparency, and integrity in the course of business is not always an easy proposition. People and institutions who believe they benefit by compromising these principles and accompanying practices will fight hard and spend big money to protect their turf and short term profits. America badly needs an individual who will stand firm and fight hard in return. There is no doubt that Elizabeth Warren is the right person at this point in our nation’s history to head the Consumer Financial Protection Agency.

While Elizabeth is the strongest candidate to head this agency, we learn a lot about our current economic crisis and the Wall Street-Washington incest that lies at its core by witnessing who is working behind the scenes to keep Warren from this post. Who is representing those who would seemingly benefit by a continued blurring if not blinding of our prized virtues in pursuit of short term profits? Reports indicate that none other than Treasury Secretary Tim Geithner is working to block Warren from this critically important post at this critically important time. The Huffington Post reports, Tim Geithner Opposes Nominating Elizabeth Warren to Lead New Consumer Agency:

Treasury Secretary Timothy Geithner has expressed opposition to the possible nomination of Elizabeth Warren to head the Consumer Financial Protection Bureau, according to a source with knowledge of Geithner’s views.

The financial reform bill passed by the Senate on Thursday mandates the creation of a new federal entity charged with protecting consumers from predatory lenders.

But if Geithner has his way, the most prominent advocate for creating the agency may not be picked to lead it.

Warren has been aggressive in putting Geithner and other members of the Obama administration and Congress on the spot in her attempt to generate the transparency needed to understand and expose the practices that caused our economic crisis. She has shown no allegiances other than to our prized virtues and in turn our nation as a whole. Clearly, Geithner has conflicting interests.

We will learn a LOT about President Obama at this point in time. If he chooses not to appoint Elizabeth Warren in the face of the pressure applied by Geithner and in turn the Wall Street banks, we will know for sure that Wall Street still owns Washington.

We have ample evidence that Treasury Secretary Geithner is a compromised individual who is largely beholden to the large Wall Street banks. His attempts to sabotage Ms. Warren’s elevation to head the CFPA confirms that.

President Obama, what’s it going to be?

Will you choose the ‘tough as nails’ Elizabeth Warren, who has shown she will work doggedly for the nation? Or, will you placate Secretary Geithner, pay lip service to the American public, and confirm Wall Street’s continued ownership of Washington by not appointing Ms. Warren?

LD

As with any test, the results are only meaningful if the process and proctor have unquestioned integrity. The proctors for the Bank Stress Test are none other than Treasury Secretary Tim Geithner and Fed chair Ben Bernanke. Why is a testing authority of the magnitude of FDIC, led by Sheila Bair, not more involved in the process? Ms. Bair is the one individual in our country with the greatest level of interaction with and understanding of the student body, that being the banking industry as a whole and individual banks specifically.

What does the FDIC, led by Ms. Bair, have to say about the upcoming Bank Stress Tests? The New York Post provides a CHILLING perspective:

The stress tests the government are about to conduct on some of the nation’s largest banks is being blasted by insiders at Sheila Bair’s Federal Deposit Insurance Corp., who say it’s a pointless exercise that’s more sizzle than steak.The FDIC’s basic beef with the stress test is that it is not a credible way to assess how much additional cash beaten-down banks will need to weather what many Wall Street experts predict will be more losses in the coming months.

The tests are conducted by the Treasury Department and the Federal Reserve on the nation’s 19 biggest banks, including behemoths Citigroup, Bank of America and JPMorgan Chase.It’s a sham,” one source told The Post, describing the test as an “open-book, take-home exam” that doesn’t actually work.

While Geithner, Bernanke, Obama et al have openly declared victory in saving the banking system, there is a very credible voice in Washington calling for a new round of Bank Stress Tests. Who has the gall to make such a demand?

Elizabeth Warren.

Warren stated as much in a Bloomberg interview I watched this morning. She is calling for new tests, not only for the 19 large money center banks but also the regional and community banks, as well. Why is Warren calling for this reexamination? Her primary concern currently centers on the pending and expected losses within the commercial real estate space through 2013.

When asked how her call for new tests has been received by Tim Geithner and team at Treasury, Warren succinctly used the term, “resistance.”

No surprise there . . . but also no transparency there, either.

LD

Elizabeth Warren and Jamie Dimon

How is it that some people are able to aggressively promote the virtues of truth, transparency, and integrity within our financial system while others would seem to talk a good game but do not truly walk the walk? The key, in my mind, is that the former are not beholden to a constituency focused on short term maximization of profits and revenues. Who is distinguishing herself as a leader in this category? Elizabeth Warren, the current chair of the Congressional Oversight Panel to investigate the U.S. banking bailout.

Warren writes in today’s Wall Street Journal of Wall Street’s Race to the Bottom. This race is very much a function of implementing strategies and developing products that have served to maximize the short term revenues of these firms, while eroding the very foundation of the financial system itself.

Of particular interest in Warren’s article is her comment on Congressional efforts to develop a consumer finance protection effort and the response of Wall Street’s CEOs to this effort. Warren derisively singles out JP Morgan’s Jamie Dimon, Wall Street’s top banker. She writes:

The consumer agency is a watchdog that would root out gimmicks and traps and slim down paperwork, giving families a fighting chance to hang on to some of their money. So far, Wall Street CEOs seem determined to stop any kind of watchdog. They seem to think that they can run their businesses forever without our trust. This is a bad calculation.

It’s a bad calculation because shareholders suffer enormously from the long-term cost of the boom-and- bust cycles that accompany a poorly regulated market. J.P. Morgan CEO Jamie Dimon recently explained this brave new world, saying that crises should be expected “every five to seven years.”

He is wrong.

Dimon seems to accept the fact that markets and economies will tend to excess as a normal order of business. The fact is our economy and markets have ballooned every five to seven years since the late ’80s. But, is this normal? No. What drove the ballooning was the willingness and desire on behalf of both borrowers and lenders to implement excessive leverage across a wide array of asset classes, utilizing both sides of the balance sheet, and even moving off-balance sheet as well.

Wall Street pushed the leverage because it drove short term revenues.

Who failed?

1. Wall Street management.
2. Wall Street’s boards of directors.
3. Regulators of all stripes, including the SEC, FINRA, OCC (Office of the Comptroller of the Currency), FHFA (Federal Housing Finance Agency), and OTS (Office of Thrift Supervision).
4. Congressional oversight.

Warren is right. Dimon is wrong.

Blaming the market and economy for excesses in the natural ebb and flow of capital is shirking responsibility.

The aforementioned CEOs, boards, and regulators have a responsibility to protect and promote prudent and wise use of capital. If that practice hits short term profits, so be it. This obligatory prudence is their charge and it will promote long term fiscal health and free market capitalism.

When will Jamie Dimon, his fellow CEOs, the members of the boards, and the regulators have the balls to call for real transparency and take a stand for true capitalism in the process? America is waiting.

Thank you, Elizabeth Warren.

LD

HOT UPDATE: John Boehner is taking it right to Nancy, proving that “what goes around comes around,” and that Obama just did NOT think through the torture memo “blowback.”

Politico‘s Glenn Thrush reports that Rep. Boehner is “asking the Obama administration to release CIA notes taken during a 2002 briefing session with Pelosi and other Congressional leaders.”

Even “Dear Abby” could have given PBO the advice he needed: “THINK!. And make a careful list of the pros and cons, including the possibility you’ll throw your own party leaders under the bus (!). Your MoveOn and Kossack rabblerousers are NOT deep thinkers! Seek the counsel of savvy, experienced men and women.”

Obama’s increasingly heavy reliance on D.C. novice David Axelrod is folly. All Axe envisioned was Republican blood in the water. But Axelrod has NO background — none, zippo! — in Capitol Hill politics warfare. Rahm? Does he think with his gonads or his brain? Methinks that, like Obama, he’s more politician than legislator, and he probably didn’t recall that both Democrats and Republicans attended those intel meetings in 2002. But now it’s too late, the water is bloodied by Democrats and Republicans alike, and here we go:

Boehner is backing efforts by Rep. Pete Hoekstra (R-Mich.), the ranking member on the House intelligence committee, to release agency’s records of meetings with Congressional members from both parties.

The GOP is hoping to spotlight the fact that Pelosi and other Democrats raised few objections when told about details of the Bush administration “enhanced interrogations” of terror suspects.

“Congress and the American people deserve a full and complete set of facts about what information was yielded by CIA’s interrogation program, and they deserve to know which of their representatives in Congress were briefed about these techniques and the extent of those briefings,” says Boehner, backing Hoekstra’s letter to DNI Dennis Blair.

He adds: “To date, the administration has fallen short in providing this information.

Mr. Hoekstra’s request to Director Blair is straightforward, and the information he is seeking is essential. The American people have been provided an incomplete picture of exactly what intelligence was made available by the interrogation program. It is now the Administration’s responsibility to ensure they are given the full picture — including which members of Congress were briefed on the methods and how extensive those briefings were.”

EARLIER POST:

When one attempts to obsure, deflect, and outright prevaricate as much as Speaker Nancy Pelosi, one can expect critics galore. And that’s just what’s happened. Politico‘s Glenn Thrush has been hammering Nancy hard. This article was published less than an hour ago:

“Pelosi playing defense on torture“:

Nancy Pelosi didn’t cry foul when the Bush administration briefed her on “enhanced interrogation” of terror suspects in 2002, but her team was locked and loaded to counter hypocrisy charges when the “torture” memos were released last week.

Many Republicans obliged, led by former CIA chief Porter Goss, who is accusing Democrats like Pelosi of “amnesia” for demanding investigations in 2009 after failing to raise objections seven years ago when she first learned of the legal basis for the program.

Had President Obama and team THOUGHT through the blowback from their we’ll-have-it-both-ways approach to the torture memos, they’d have immediately realized the can of worms they were opening for members of their own party. Furthermore, Obama’s failure to look at the entire chessboard is endangering his other programs:

Pelosi finds herself on the defensive at a time when she needs to be on the offensive, pushing through a record-breaking budget, health care reform, a controversial cap-and-trade proposal and a supplemental funding bill for Iraq and Afghanistan.

Someone on Pelosi’s staff spoke anonymously to Thrush:

“As soon as the president made the decision to release [the memos], I was telling people that the Republicans were going to come after us, saying she knew about it and did nothing,” said an adviser to Pelosi (D-Calif.), speaking on condition of anonymity. “And I’m sure we’re going to get hammered again when they release all those new torture photos,” the person said.

Republicans are grateful for the gift:

But Pelosi’s allies were less prepared to confront the fallout from her convoluted answers during three sessions with reporters last week — answers that raised new questions and handed Republicans a fresh line of attack on a speaker at the height of her power.

“I’m puzzled, I don’t understand what she’s trying to say,” said Rep. Pete Hoekstra (R-Mich.), former chairman of the House Permanent Select Committee on Intelligence and currently the committee’s ranking minority member.

“I don’t have any sympathy for her — she’s the speaker of the House; there should be some accountability. She shouldn’t be given a pass,” added Hoekstra.

Minority Leader John Boehner (R-Ohio) promised to keep up the heat, telling reporters last week, “She and other leaders were fully briefed on all of these interrogation techniques. There’s nothing here that should surprise her.”

This next quote left me both flabbergasted and infuriated — because the Dems’ main concern seems to be how they appear in the media, not whether what Pelosi did and said are right or wrong:

“The Republicans may have won a news cycle, but we’re doing what we want to do,” said Pelosi spokesman Brendan Daly, pointing to Pelosi’s legislative successes during President Barack Obama’s first 100 days in office.

Check Memeorandum.com for blog posts related to Thrush’s article.

For more on Nancy Pelosi’s modus operandi, see “On Pelosi’s Duplicity and Apparent Sandbagging of Elizabeth Warren.”

This attack piece proves how Pelosi and other Democratic leaders let Bush have his way with TARP and ceded ENORMOUS control to the Treasury Department. Now that Elizabeth Warren is analyzing and describing the real problems with TARP, Pelosi is maneuvering to cut her off at the knees. It’s quite a read.

This struck me as a profound statement. Not just as reflection of how our government, media and citizens should perform in general. Or on this matter in particular. But as a indication of where we are at, in this moment in time, as a nation. That these stress tests are not just about banks, their assets and their results – good or bad. These stress tests have now become something of a stress test of our government. And we are anxiously awaiting the results.

Will our government be honest in its actions and truthful in its words? Will our government treat the American people as true and active partners in our government? Or will we be shut out of the process and delegated to the role of viewing audience?

I don’t know whether our government will pass or fail this stress test. I only wish I was more confident of a positive result.

So what do you think – Will our government pass its own stress test?

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Since regulators are set to release stress test results on 19 of the biggest U.S. banks on May 4th and a paper on the methods used on the stress tests on April 24th, it seemed fitting to review the goal of the stress test and what is at stake with the results. Not just for the banks, but all the rest of us. A subject on which both Elizabeth Warren and Eliot Spitzer, also a recent guest on Morning Joe, had more than a few worthy insight.

From Bloomberg:

The results of next month’s stress tests are designed to provide clarity for the market, by eliminating uncertainty about the financial health of banks, said White House economic adviser Jared Bernstein. “They want to know that this diagnosis is going to provide useful information about the health of the balance sheets of the banks,” Bernstein said in an interview with Bloomberg television today.

The tests are designed to mesh with the administration’s effort to remove distressed mortgage assets from banks’ balance sheets, which have hampered lending to consumers and businesses.

In their assessments, regulators will look at off-balance- sheet commitments, earnings projections, risks of the banks’ business activities and the composition and quality of their capital, according to the Treasury.

The exams will help provide a ranking of the financial health of “one institution relative to another,” Frederic Mishkin, a Columbia University economist and former Fed governor, said in a Bloomberg television interview. “That can be very useful if government then decides it needs to take steps to deal with weak institutions.”

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